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Japanese dairy giant acquires Hills cheesemaker

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One of Japan’s largest dairy companies has paid $14 million for 90 per cent of Adelaide Hills cheesemaker Udder Delights – a family enterprise that began life in the 1990s with a couple of goats named Nell and Nora.

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The $14.04 million deal between Megmilk Snow Brand Group and the Lobethal-based business was signed on September 29.

Sheree Sullivan, daughter of Udder Delights founder Trevor Dunford, and her husband Saul Sullivan will continue to lead the business in their roles of chief executive and managing director, respectively, as well as retaining a 10 per cent stake through Sullivan Enterprises (SA).

“For Saul and I it’s been a really positive outcome,” Sheree Sullivan told InDaily.

“It’s been a very clear directive from them [Megmilk Snow Brand] that it is business as usual and they just want us to keep doing what we’re doing.

“I liken it to a large winery investing into a boutique high-end brand… there is no interest in making us a commodity.”

Udder Delights Australia, previously the Udder Delights Group, grew from humble beginnings when Trevor Dunford and wife Estelle acquired two goats – Nell and Nora – for their new family farm in Lobethal in 1995. Their herd grew to 40, hand milking was replaced by machines, and they eventually set up Udder Delights and established the cheese factory in what was previously the Onkaparinga Woollen Mill.

The business now employs more than 40 people, all of whom will retain their jobs, and produces a range of goat and cow milk cheeses.

Dunford and the Sullivans previously each owned 50 per cent of the business, and Sullivan said the sale was precipitated by the fact that her father was planning to retire and wanted to relinquish his share. (The Udder Delights Cheese Cellar at Hahndorf is a separate business, owned by the Sullivans.)

One of the attractions of Megmilk Snow Brand as a buyer was its extensive industry experience: it has been manufacturing yoghurt, butter and cheese for 90 years in Japan, and making white-mould cheese in Australia (under the Unicorn, Nowra Farmhouse and Flinders Estate brands) for around 30 years.

The deal was celebrated in Tokyo last night at an SA Business Network function hosted by state Trade and Investment Minister Martin Hamilton-Smith, who said it would open up major export markets for Udder Delights in Japan and Indonesia.

‘It’s a tribute to the vision of Sheree and Saul Sullivan and Trevor Dunford, who started the Udder Delights brand in the Hills near Lobethal in 1999,” he said.

Hamilton-Smith said Megmilk managing executive officer Akihiko Uchida was a special guest at the function, and was “very enthusiastic” about the relationship.

“Mr Uchida embraces the opportunity to invest in South Australia and can see more opportunities for our products in the Japanese market.”

Sheree Sullivan said the Japanese business was particularly interested in the export potential of Udder Delights’ premium King Saul Raw Blue Cheese (all its cheeses are currently sold only in Australia).

There is also potential for further growth in the business.

“We already increase production by 30 per cent each year,” she said.

“Every year we’re in expansion and that will continue … There’s always room for growth and I would like to think long term that Udder Delights would become butter makers as well.”

Having started out as one of the business’s first cheesemakers and watched its evolution over the past two decades, she admits it’s hard to believe it has now sold for $14 million.

“I’ve had those moments where I can’t believe it, because our cheese factory was the size of a kitchen and I was doing 60-litre batches when we started …

“Now this is a new chapter in our lives but it’s an exciting chapter.”

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